1001 How-Tos

Saving money can be difficult in an economy that discourages people from spending, but in the context of mass media that encourages spending on everything that you want. This can seem illogical, but it seems to be the way of all capitalism, and if your children are not careful, they can be caught in quite a number of financial traps.

First of all, they may be taught in school that working hard can earn them money, but they might not be taught how to keep that money handy – and they could be misled into believing that hard work can and should be rewarded by spending magnificently on big, noisy things. This can be true especially for teenagers, who face the pressure of their fellow teens when they want to dress well in school, join other teens in their hangouts, and spend their money – actually, your money – in getting things that they want.

You may have a hard time convincing teens to start saving their money, but there are actually ways that you can motivate them to start their own saving. Here are a few ways for you to begin.

- Set a good example. In other words, show, don’t tell. If you keep on telling your kids to save, but you don’t save money yourself and constantly spend it on luxury items, then you don’t only send the wrong signal to your children, you also encourage them to do their own spending. Of course, you are licensed to spend your hard-earned cash on things that you need, but make up for your spending in other areas, say in having a set amount of money to set aside each month for your bank account, or investing in stocks and bonds.

- Don’t stop at the example: get your kids their own bank account. Although this may be counterintuitive, it can actually force your kids to save. Put some money into the account to start it, but only enough to do so; let your kids find ways to make their bank accounts grow. Encourage them to take part time jobs, such as mowing your neighbors’ lawns, babysitting, or even writing short articles for websites. There are many ways that they can earn money, and this will not only motivate them to save, it will actually show them the value of a job.

- And don’t stop at the bank! If you can, open insurance accounts for your teens and make them pay a portion of the premiums. Moreover, make your teens invest in mutual funds, stocks, bonds, or anything that will allow their money to grow. Encourage them to read more about how the stock market works. This way, you can empower them to make their own money later, and give them a chance to start getting money early. And since you are not giving them any money and they are making it themselves, they will find ways to keep themselves out of trouble on their own, without your interference.

- Have rewards ready for good savings, say a hundred dollars for every five hundred that your teen saves. Avoid rewarding them, however, for good grades, as they may work in school for monetary rewards – think, if you kept them in this mindset, what would happen when they get to college?

Give rewards for jobs, not grades, and your kids will be in school to learn. School, after all, is another set of motivational rules altogether.